Forever 21 under labor investigation

Friday, March 15, 2013

Forever 21 has been ordered by a district court to comply with a subpoena issued by the U.S. Department of Labor's Wage and Hour Division in August, demanding the retailer produce supply chain documents regarding garment shipping.
The retailer had declined to follow the subpoena.
The organization originally demanded the documents following a sweep of downtown Los Angeles garment sewing factories that found goods destined for Forever 21 stores were produced in violation of overtime, child labor or minimum wage statues. The retailer is being investigated under the "hot goods" provision of the Fair Labor Standards Act.
In the case, Forever 21 had argued the information sought from the subpoena was irrelevant to the investigation, calling it an abuse of process. If that argument was to be found insufficient, it also requested a protective order to prevent the release of trade secrets, a request that was ultimately denied because the retailer failed to show good cause for the action.
"Garment workers historically have been subjected to exploitation and paid substandard wages," M. Patricia Smith, solicitor of labor, said in a statement. "The order underscores that everyone in the supply chain has a responsibility to ensure that workers receive the federal minimum wage and earned overtime, and it demonstrates our commitment to enforcing those protections despite tactics designed to obscure the employment relationship."
The Department of Labor has conducted more than 1,500 similar investigations in Southern California during the past five years, finding violations 93 percent of the time. These violations include paying workers less than the state's minimum wage, which is $7.25 per hour, and a failure to pay overtime. - Jon Ross